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Facts
The assessee, Shri Bara Bavan Modh Brahman Vidhyotejak Trust Mandal, applied for approval under section 80G(5) of the Income Tax Act. The CIT(Exemption) rejected the application and cancelled the provisional approval, citing that the trust's objects provided financial assistance specifically to the “Shri Bara Bavan Modh Chaturvedi Brahmin Community,” thereby benefiting a particular religious community or caste, which violates Section 80G(5)(ii).
Held
The Tribunal found that the CIT(Exemption) failed to properly consider the comprehensive explanations, documents, and case laws submitted by the assessee regarding its charitable activities. Consequently, the Tribunal decided to remand the matter back to the CIT(Exemption) for fresh consideration, instructing them to pass a new order after duly evaluating all submissions and evidence from the assessee.
Key Issues
Whether the CIT(Exemption) was justified in rejecting the trust's 80G approval application and cancelling provisional approval, on the basis that the trust benefited a specific religious community, without properly considering the assessee's explanations and evidence.
Sections Cited
80G(5), 80G(5)(ii), 80G(5)(iv), 12A, 12A(1)(ac)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE JUDICIAL MEMBER (Assessment Year: N.A) Shri Bara Bavan Modh Brahman The Commissioner of Vs. Vidhyotejak Trust Mandal, Income Tax(Exemption), 1305, Shivam Society, Ahmedabad. Sector 27, Gandhinagar-382028. [PAN :AAATS8400 J] (Appellant) .. (Respondent) Appellant by : Shri S N Divatia with Shri Samir Vora, ARs Respondent by: Shri R P Rastogi, CIT. DR Date of Hearing 17.02.2026 Date of Pronouncement 19.02.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 24.12.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, relating to the Assessment Year N.A.
The assessee has raised the following grounds of appeal: 1.1 The order passed by U/s.80G(5) on 24.12.2024 by CIT(Exem), Ahmedabad rejecting the application for approval of the appellant trust u/s 80G(5)(ii) of the Act and cancelling the provisional approval by holding that the appellant trust was for the benefit of a particular religious community or caste which is excluded from the benefits of sec.80G(5) is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. CIT(Exem), has grievously erred in law and or on facts in not appreciating that the appellant trust was not a religious trust or for the Asst. Year : N.A - 2– benefit of a particular religious' community or caste. The Id. CIT(Exem) has erred in not considering fully and properly the explanations furnished and evidence produced by the appellant trust. 2.2 That the in the facts and circumstances of the Id. CIT(Exem), ought not to have held that the appellant trust was a religious trust inclusive of religious objects for the benefit of a particular religious' community or caste. 3.1 The Ld.CIT(Exem), has grievously erred in law and on facts in rejecting the approval of the appellant trust u/s.80G(5)(ii) of the Act and cancelling the provisional approval. 3.2 That the in the facts and circumstances of the ld.CIT(Exem), ought not to have rejected the application for registration by ignoring the evidence on record with the application for registration. It is, therefore, prayed that the rejection of the application for approval u/s.80G(5) and cancellation of the provisional approval by the CIT(Exem), may kindly be deleted.
The assessee is a public charitable trust duly constituted under a Scheme approved by the Charity Commissioner vide order dated 24.09.2018. The trust is registered under the Gujarat Public Trust Act, 1950 vide Registration No. A/37/Ahd dated 15.09.1952. The objects of the trust are to provide financial assistance to needy students for education by way of fees, loans, scholarships, etc. The assessee-trust also runs educational institutions such as Shri Matangi Bal Vidhyamandir and Shri Matangi Sarva Vidyalay. The trust maintains books of account and records which are audited under the trust laws. The assessee trust was registered under section 12A prior to 01.04.2021 and subsequently applied for provisional registration under section 12A(1)(ac) in Form 10AC, which was granted on 24.09.2021 for AY 2022-23 to 2024-25. The assessee was also granted provisional approval under section 80G(5)(iv) from 24.09.2021 for the same period. The Ld. CIT (Exemption) issued notice dated 05.10.2024 seeking details, which were furnished vide reply Asst. Year : N.A - 3– dated 28.11.2024. Another notice dated 09.12.2024 required submission by 12.12.2024, and the assessee submitted a detailed reply on 12.12.2024 with exhaustive explanations, documents, and case laws. However, the Ld. CIT (Exemption), for reasons stated in paragraph 8 of the impugned order, concluded that the objects in para-5 of the trust deed providing financial help to students of Shri Bara Bavan Modh Chaturvedi Brahmin Community were for the benefit of a particular religious community or caste and therefore violated section 80G(5)(ii). Accordingly, the approval was rejected and the provisional approval was cancelled.
Aggrieved by the order of the Ld. CIT(E), the Assessee filed appeal before the Tribunal.
At the outset, we note that notices were issued from time to time calling for details and documents. The Ld. CIT (Exemption) rejected the application on the ground that the assessee trust was for the benefit of a particular religious community or caste. The Ld. Counsel for the assessee submitted that in response to the notice dated 05.10.2024, the assessee trust had fully explained the objects and activities and also pointed out the expenditure on religious purposes incurred in earlier years. Further, in reply to the notice dated 12.12.2024, exhaustive explanations regarding charitable activities were furnished. The Ld. CIT (Exemption) failed to consider and deal with the explanations and material on record. The Ld. CIT (DR) submitted that the assessee trust should furnish requisite details and explanations before the Ld. CIT (Exemption). Having considered the facts and submissions, we are of the view that the interests of justice would be served by remanding the matter to the Ld. CIT (Exemption) for Asst. Year : N.A - 4– fresh consideration of the application and to pass an order after considering the submissions and explanations of the assessee. The assessee shall comply with the notices issued and shall not seek unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 19.02.2026.
Sd/- Sd/-/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Copy) (True Copy) Ahmedabad; Dated 19.02.2026 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy